Through the proposed stake sale, Reliance Equity Advisors will look at exiting from its investment.

Bangalore-based Shankara Infrastructure Materials Ltd is looking to rope in a strategic investor as it looks to give an exit to its private equity backer, Reliance Equity Advisors, said sources familiar with the development. The company, which makes steel pipes and tubes, has mandated Mumbai-based Ambit Corporate Finance for the transaction.

Sources said the promoters are also exploring a stake sale along with Anil Dhirubhai Ambani Group's (ADAG) private equity arm.

The development comes close on the heels of Belgium’s Aliaxis Group S.A. acquiring majority stake in Bangalore-based plastic pipe manufacturer Ashirvad Pipes Pvt Ltd for Rs 800 crore earlier this year.

Emails sent to Shankara and Reliance Equity Advisors did not elicit a response at the time of filing this article. An Ambit spokesperson declined to comment when contacted by VCCircle.

According to VCCEdge, Reliance Alternative Investments Fund Private Equity Scheme I picked up 10 per cent stake in Shankara in March 2011 for Rs 120 crore. Shankara is run by its promoter and managing director Sukumar Srinivas.

Shankara started as a distributor and retailer of steel pipes, tubes and other steel products and also ventured into manufacturing. It has steel tube manufacturing plants in Hyderabad and also owns Vishal Precision Steel Tubes and Strips, which makes tubes and other steel products out of Bangalore.

According to a report by ICRA, Shankara had reported revenues of Rs 805 crore with profit after tax of Rs 16 crore for the first six months of FY13. The company reported a 36 per cent increase in revenues to Rs 1,385 crore with a 40 per cent jump in PAT to Rs 28.32 crore in FY12.